Comprehensive spending review 2007
What it needs to deliver on child poverty

Introduce free at the point of delivery good-quality childcare

Two key advantages are attributable to good childcare: the ability of parents to work and developmental gains for the child. Both are critical to improving life chances for the poorest children. There is growing recognition of the centrality of childcare to government objectives, culminating in the Treasury publishing, in December 2004, a ten-year childcare strategy. The strategy not only underlies the importance of childcare to government objectives, but details welcome changes to address some of the manifest problems with current provision.

Current provision is primarily market-based with a government demandside subsidy provided through working tax credit, and with supply-side intervention through nursery places for three- and four-year-olds, Sure Start children's centres and out-of-hours school-based provision. The December 2004 Pre-Budget Report extended each of these (dates of implementation vary by reform): increasing the proportion of childcare costs claimable (from 70 to 80 per cent) and the childcare maximums; increasing the extent of free nursery entitlement for three- and four-yearolds; introducing children's centres in each community by 2010. CPAG welcomes these reforms and the Government's acknowledgement that this is an area where policy has not gone far enough. Good as it is, more is needed to tackle the inadequacy of childcare, and we still lack the commitment to universal, free at the point of delivery childcare required to support fully the eradication of child poverty.

The problem with current policy is that it falls down before two hurdles: excessive expense and inadequate supply. Both factors bear most heavily on the poorest. The typical cost (2006 prices) of a full-time nursery place for a child under two in England is £142 a week.52 In some parts of the country, particularly London and the South East, the cost of a nursery place is even higher - normally £197 a week in Inner London. The typical cost of a full-time place with a childminder for a child under two is £132 a week, and nannies cost anything from £250 to £500 a week, depending on whether they live in or out. Although the Government provides help with the cost of childcare for low-income families through working tax credit, the current average award is just £49.80 a week,53 and there is no extra help for parents with three or more children.

As for supply, there is only one registered childcare place for every four children under the age of eight.54 Moreover, there is an inverse relationship between childcare availability and area deprivation. Deprived wards have about half the national average number of childcare places.55 High turnover is another problem in the provision of paid-for childcare. According to a recent Public Accounts Committee inquiry into early years provision, of 626,000 new full-time places, 48.1per cent have already closed down.56 High turnover is likely to be greatest in poorer areas where profits may be relatively low and demand suppressed by parents' inability to afford provision. Quality is likely to be impaired by high turnover of staff and projects, and again this is likely to disadvantage the poorer areas disproportionately.

CPAG recognises that providing a sustainable universal childcare service is a complex undertaking. In addition to issues of principle, there are workplace issues around the number of child carers, and the training and remuneration they receive. These workplace issues, in part being addressed as part of ongoing policy reform, are critical to creating a service that is not only of good quality - sufficient to maximise child development - but is also sustainable. Still, we believe that greater urgency needs to be placed on rolling out children's centres as a vehicle for childcare (and other services).

In the short term, sustainable ways must be sought of making more childcare available in deprived areas, as well as ensuring a greater variety of provision to match need. The long-term ambition should be universal childcare, free at the point of delivery, and the immediate priority is to establish an action plan with steps to get there, starting now.

Notes

52 Daycare Trust, Childcare Costs 2006, at www.daycaretrust.org.uk
53 See K Stanley, K Bellamy and G Cooke, Equal Access? Appropriate and affordable childcare for every child, Institute for Public Policy Research, 2006
54 See note 52
55 Strategy Unit, Delivering for Children and Families, 2002, section 3.1.2; also see Department for Education and Skills, Department for Education and Skills: five year strategy for children and learners Cn6272, July 2004, p21 for graphical illustration by local authority.
56 Public Accounts Committee, Early Years: progress in developing high quality childcare and early education accessible to all, House of Commons, September 2004, HC-444, para 3

Comprehensive spending review 2007
What it needs to deliver on child poverty

Contents page
Introduction
The Government’s record
What should the spending review deliver?
Provide most for those children at greatest risk of poverty
Work towards better jobs, not just more jobs
Ensure the safety net protects families against poverty
Maximise the contribution of child benefit within family support
Introduce free at the point of delivery good-quality childcare
Make the reduction of child poverty central to the new child support policies
Make education truly free at the point of delivery
Provide benefit entitlement to all UK residents equally, irrespective of immigration status
Reduce the disproportionate burden of taxation on poorer families
Improve the quality of delivery and gear it to the needs of the poorest families
Notes

Print the entire document